To Adjust or Not to Adjust

The market continues to take option traders on a volatile ride, but adjusting your position is not always the answer.

Are You Reviewing Your Trades?

Sometimes the best move is to do nothing and stay in cash. But that doesn’t mean sit idle. This is the perfect time to review your past trades.

Volatility Induces Anxiety

Economic uncertainty, trade tensions, geopolitical events and inflation have added considerable volatility to markets. There have been big swings in interest rates, which have a direct influence on equity indexes, currencies, precious metals and numerous commodities. In addition, automated trading systems can exacerbate rapid price changes during volatile periods. As volatility rises, so do risk and anxiety.

Your Naked Put Warning

With market volatility at extreme levels, option premiums are tempting—but don’t let that fool you. Selling naked puts can be a high-risk strategy, especially if things move against you.

Fair Value Is a Foundation for Trading

Spend time with a broker or pit trader from the era when all trades were executed by brokers in trading pits at exchanges and you will learn about open outcry and the information it provides. Pits were created to facilitate trade. To an untrained eye a trading pit is a ring filled with angry, aggressive people wearing badges on various colored jackets. But for a seasoned observer a trading pit reveals incredible amounts of information not available on screens or trading platforms. Professional traders monitor order flow. They use a combination of market-generated information (technicals) and fundamentals (supply/demand or earnings) to define and refine strategies.